“I have made rejection of the bush doctrine the central project of my life,” announced George Soros in January. “I am determined to do what I can,” he added, to assure that President Bush is not reelected.
Coming from someone else, such statements might be written off as delusional, but Soros is a man with a record of achieving outsized goals. A financier who began with a stake of a few thousand dollars, he traded and speculated his way to a fortune of many billions, making him one of the world's richest men. Then he turned to philanthropy, an enterprise he undertook with so much largesse and so much panache that he quickly won a place for himself alongside the likes of Andrew Carnegie and John D. Rockefeller in the pantheon of legendary donors.
Soros has declared his intent to devote similar energy and single-mindedness to his new “project.” Campaign-finance regulations may place stringent limits on donations to candidates—and now, with the McCain-Feingold law, to political parties as well—but they still allow unlimited donations to so-called “independent” political committees. According to reports last November, Soros had already pledged $18 million to three liberal anti-Bush groups of this kind, announcing that “If necessary, I would give more.” As he sees it, “America, under Bush, is a danger to the world. And I'm willing to put my money where my mouth is.”
This impassioned crusade may come as a surprise to some. Soros's fame rests not on his political commitments, after all, but on his achievements as “the world's greatest money manager” (a title bestowed on him by Institutional Investor magazine) and as the open-handed benefactor of the nations of the former Soviet bloc. As it turns out, however, there are other sides to the eccentric figure who has now decided to make his formidable presence felt in our electoral politics.
Born in Hungary in 1930, Soros began life as George Schwartz. His father, Tivadar, was from humble origins; his mother, Erzebet, from money. Both were Jews, but non-observant (she eventually converted to Catholicism). Once married, Tivadar had to work just two hours a day managing some of his wife's family property, which provided a handsome living for them and their two sons, Paul and George. At some point during the boys' childhood, the parents decided to change the family name and chose the Hungarian-sounding but in fact obscure Soros. It means “soar” (in the future tense) in Esperanto, the made-up, trans-European language promoted by those who dreamed of a world free of nationality. Tivadar was among its leading proponents.
The arrival of World War II had, at first, little effect on the privileged Soros family. The athletic Paul would later recall his main privation as the unavailability of Dunlop tennis balls; he had to make do with a brand of lesser quality. Although Tivadar procured American visas for his wife and sons, saying he himself would remain in Budapest, Erzebet refused to go.
But 1944 brought an ominous change. The Nazis, fearing for the loyalty of their ally, Admiral Horthy, the military dictator of Hungary, occupied the country and forced Horthy to replace his government with one more devoted to Hitler's goals. Adolph Eichmann soon arrived to oversee the liquidation of Hungary's Jews, a project over which Horthy had temporized. Now Tivadar secured false identity papers for each member of his family and dispersed them to various dwellings away from the family's own homes. In this manner, identified as Christians, all four survived the Holocaust.
Soon after the war it became apparent to Tivadar that Hungary's Soviet “liberators” were not going to withdraw but would instead impose a Communist regime. By 1947 he arranged for George, then seventeen, to leave for London, where some cousins were prepared to provide shelter. Nazi and Communist expropriations having taken their toll on the family's holdings, there was insufficient income to support George while abroad; studying at the London School of Economics (LSE), he sustained himself by working at odd jobs.
After finishing his degree, Soros found work at the London stock exchange. One thing led to another; in 1956, quite by coincidence, he was hired for a position on Wall Street. In America, he began to invest the money of friends and acquaintances as well as his own modest bankroll, and was soon turning a handsome profit. He set himself a five-year goal of building his fortune to a half-million dollars, a sum on which he imagined he might retire and devote himself to intellectual pursuits (which he always regarded as his true calling). As his returns exceeded his goals, he set his financial sights higher, evidently spurred less by greed than by pride in his flowering talent as a speculator and his love of the game.
Having already lived in two other countries, Soros had an eye for international trading. He pioneered maneuvers that exploited small variations from one country to another in the value of a given share or financial instrument. He had a sharp instinct for currency trading, and his specialty was the fast deal. As a recent New Yorker profile put it, he was “adept at finding tax loopholes and operating in gray areas where oversight is scant and maneuverability wide.”
As late as the early 1980's, Soros was telling interviewers that he did not believe in philanthropy. He had already created the Open Society Fund, the first of what would become a constellation of foundations through which he was to channel his generosity. But the original motive, he explained, was not primarily benevolent. The fund was set up as what the law calls a charitable lead trust, which Soros described as “a very interesting tax gimmick” allowing him to pass large sums to his heirs untaxed.
Whatever the origins of his eleemosynary activities may have been, they eventually became his main passion. Turning over the management of his investment funds to deputies, he threw himself into charitable work with the same zeal he had once devoted to trading. His gifts made a big impact in the countries in eastern Europe in transition from Communism. In some of them, his largesse apparently exceeded the aid received from the U.S. government.
For the breadth and imagination of his giving, Soros has been widely, and deservedly, praised. A reviewer in the New York Times did not hesitate to call him “one of the great men of our times.” Never shy about his own accomplishments, Soros has basked in this adulation. He calls himself a “stateless statesman.” Referring to the region where he concentrated his philanthropy, he declares unabashedly that “the former Soviet Empire is now called the Soros Empire.”
Nevertheless, it is neither for his charitable work nor for his financial wizardry that Soros wishes most to be recognized. Rather, it is for his intellectual accomplishments. From early on, as he would have it, he fully expected to become another Keynes or Einstein. At the London School of Economics, he studied economics but was fascinated by philosophy. He was especially taken with the work of the Anglo-Austrian philosopher Karl Popper, who was then on the LSE faculty and served, at least formally, as the young refugee's adviser. Soros likes to say that Popper's ideas about the “open society” and the fallibility of human knowledge have been the starting point for his own philosophical contributions.
These begin with the theory of “reflexivity”—his term for the notion that in human affairs, unlike in the world of inanimate nature, the observer is himself part of the universe that he is attempting to observe; thus, the very act of observation may influence the reality being analyzed. This insight has been, in turn, the basis for Soros's theory of history, which revolves around “boom-bust cycles.” When a social enterprise of some kind—a business, a movement, a nation—is doing well, Soros argues, this creates a bandwagon effect that leads inevitably to overvaluation or overreaching, producing an artificial “bubble” that must eventually burst.
Alas, for all his aspirations, Soros has met with disappointment as a philosopher. He spent three years weaving his ideas into a book titled The Burden of Consciousness but left it unfinished when, as he confessed to his biographer, he himself could not understand on the morrow what he had written the day before. In lieu of that volume, he has presented excursuses on reflexivity in most of the half-dozen books he has published. These passages have repeatedly evoked exasperation from reviewers, who have found the idea both obscure and commonplace. But Soros has shrugged off these criticisms, commenting that his theory is “not yet properly understood.”
As if to vindicate himself, Soros has said that his philosophical framework has “turned out to be very helpful to me in the financial markets”—a tantalizing claim and one that, undoubtedly, helps to explain the wide audience for his books. But the people who have worked closely with Soros see much more intuition than philosophy in his methods. As his son, Robert, who has taken over some of the family business, has observed:
My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking . . . at least half of this is bullshit. I mean . . . the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason.
Nor, indeed, is it easy to detect the influence of Soros's philosophy on his philanthropic activism. One might assume that an understanding of “reflexivity”—that is, our supposed inability to stand apart from social phenomena and judge them in a dispassionate light—would demand a certain modesty in the rendering of practical judgments. But Soros has never hesitated to advocate sweeping change or to pursue grand political strategies, serenely confident in his own ability to discern the needed remedies for the ills of dozens of different societies and indeed for the world as a whole.
At some point in the late 1990's, after years of devoting himself to the former Communist world, Soros decided that his attention was required in America. His first major venture into domestic issues was in support of the campaign to decriminalize drugs. He credits the poet Allen Ginsberg, an apostle of sexual and chemical liberation whom he befriended in the 1980's, with having alerted him to the injustice of American drug laws. Aryeh Neier, president of the Open Society Institute, and a man sometimes described as Soros's “secretary of state,” has explained the allegedly malicious intent behind our current drug laws in these loaded terms: “[C]riminalization is a strategy that buys into the notion that if you lock up enough young black males—for whatever reason—you will promote public safety.” In line with such thinking, Soros has not only made possible various state ballot initiatives to legalize “medical” marijuana, but he has advocated such “reforms” as “making heroin and certain other illicit drugs available on prescription to registered drug addicts.”
No less outré have been Soros's many pronouncements since the late 1990's on the state of the American and global economies. “Capitalism is coming apart at the seams,” he declared at the time of the Asian financial debacle. Decrying the rise of what he called “laissez-faire ideology,” Soros painted a picture at once apocalyptic and unoriginal:
There has been an ongoing conflict between market values and other, more traditional value systems. . . . As the market mechanism has extended its sway, the fiction that people act on the basis of a given set of nonmarket values has become progressively more difficult to maintain. Advertising, marketing, even packaging aim at shaping people's preferences rather than, as laissez-faire theory holds, merely responding to them. Unsure of what they stand for, people increasingly rely on money as the criterion of value. . . . The cult of success has replaced a belief in principles. Society has lost its anchor.
And what remedies did Soros suggest? As a first step, the creation of an international central bank; in the long run, nothing less than a transformation of how the world itself is governed. “To stabilize and regulate a truly global economy,” he wrote, “we need some global system of political decision-making.” Though it was neither “feasible nor desirable” to “abolish the existence of states,” Soros conceded, nevertheless “the sovereignty of states must be subordinated to international law and international institutions.”
Two years later, with Asia's woes abating rather than spreading as he had forecast they would, Soros admitted to having “some egg on my face.” But even as he acknowledged the error of his diagnosis, he clung fast to his far-reaching prescription. A world of globalized economics, he insisted, required something akin to globalized government.
Given this set of predilections, it is not hard to see how Soros would have been driven to paroxysms of frustration by the notoriously “unilateralist” Bush administration and the war in Iraq. As he explains in his new book, The Bubble of American Supremacy,1 the United States has now fallen into “the hands of a group of extremists” whom he identifies as “neoconservatives” or “social Darwinists” and who espouse an “ideology of American supremacy.” The only element missing from the “master plan” they hatched well before arriving in office in 2001 was a suitable pretext for action. For them, according to Soros, the attacks of 9/11 were therefore a godsend. “Communism used to serve as the enemy; now terrorism can fill the role.”
As an alternative to the arrogance of American supremacy secured by means of military power, Soros proposes the “Soros doctrine.” Through the good agency of the United Nations and our own foreign-aid efforts, he writes, we need to answer our enemies not with force of arms but with “preventive action of a constructive nature.”
What explains this surpassing faith in the efficacy of international governance and institutions, especially in light of the record of such institutions in recent years, not to say over the past century? Here one can only speculate, but at least part of the answer would seem to lie in biography.
It is surely not incidental that Soros's father was a devotee of Esperanto, with its grandiose and naive strategy for overcoming the fraught nationalist divisions of Europe. Soros himself, we know from his chroniclers, spent many an afternoon as a student in London propounding Esperantism at Speaker's Corner in Hyde Park.
No less pertinent in this connection is Soros's problematic relationship to his own Jewishness. Though he often claims authority for his views by invoking his experience under the Nazis—he confided to the Washington Post that some of the things President Bush says “remind . . . me of the Germans”—he is strikingly aloof from his Jewish origins. None of his vast philanthropy has been directed toward Israel, and his coldness toward the Jewish state has on occasion shaded into outright hostility: in a speech last May to the Yivo Institute for Jewish Research, Soros likened the behavior of Israel to that of the Nazis, invoking some psychological jargon about victims becoming victimizers.
It is not only Israel that Soros abjures but Jewish charities in general, an attitude he attributes to his observations of the Judenrat, or Jewish council, that the Nazis created in Budapest, for which he worked as a courier, and by a rather weird experience with the Jewish Board of Guardians during his years in London. If blaming Jewish organizations—or Israel—for the works of the Nazis is hard to fathom, his attitude toward the Board of Guardians is no more explicable. It seems he appealed to it for financial support after breaking a leg, but the board arranged instead for him to receive a British-government stipend. When he wrote an aggrieved letter deploring this as a tawdry way for “one Jew [to] treat . . . another in need,” the board backed down and provided him with a cash allowance for the duration of his recovery. Later, he would confess insouciantly to his biographer the reason he had been so angry: he had already arranged to receive the government payment and had hidden this fact from the board in the hope of receiving duplicate benefits. It was, he said, “a double-dip,” and one that “solved all my financial problems.”
More remarkable still in this connection is Soros's frequent comment that 1944 was “the best year of my life.” It is easy to see how a boy of fourteen might have been “excited” by the “adventure” of evading the Nazis with an assumed identity, as he says he was. But 70 percent of Soros's fellow Jews in Hungary, nearly a half-million human beings, were annihilated in that year. They were dying and disappearing all around him, and their numbers no doubt included many whom he knew personally. Yet he gives no sign that this put any damper on his elation, either at the time or indeed in retrospect.
“My Jewishness [does] not express itself in a sense of tribal loyalty,” Soros explains. About this he is certainly correct. “I [take] pride in being . . . an outsider who [is] capable of seeing the other point of view.” About this he is correct as well, if by “other” we understand “adversary.” In any event, this flight from Jewish particularism into a willed universalism is itself a familiar reflex, if not a full-fledged syndrome, among many Jews in the modern era, one of whom, a Yiddish-speaking philologist, was sufficiently inspired by it to invent Esperanto. In Soros, it has been taken to a startling extreme.
Cold as he is toward the Jewish people, Soros is not much warmer toward his adopted country. “I had never quite become an American,” he once said. Now he complains that today's America “is not the America I chose as my home,” as if, by turning conservative and electing George W. Bush as President, the country has failed to live up to him.
The egoism of the remark is revealing. Soros has admitted to having “carried some rather potent messianic fantasies with me from childhood, which I felt I had to control, otherwise they might get me in trouble.” Having made his mark, he now seems to give them free rein. He told one interviewer that he had “godlike, messianic ideas,” and another that he sometimes thought of himself as “superhuman.” To still a third he explained that his “goal is to become the conscience of the world.”
This self-imagined messiah has now come to save the world from the America of George W. Bush and its war against terrorism. He is convinced that this is an unjustified war, contrived in response to events (the attacks of 9/11) that “should have been treated as crimes against humanity . . . requir[ing] police work, not military action.” To say the least, it is a strange idea, and an even stranger role, for one who owes not only his immense fortune but also his freedom and even his life to America, and in particular to its willingness to confront those who have committed crimes against humanity with enough military force to defeat and stop them.
1 Public Affairs, 207 pp., $22.00.